S-Space College of Law/Law School (법과대학/대학원) The Law Research Institute (법학연구소) 법학 법학 Volume 40, Number 2 (2000)
자유와 공평의 타협으로서의 소득 개념
Concept of Income as a Compromise between Equity and Freedom In a Historical and Comparative Law Perspective
- Issue Date
- 서울대학교 법학연구소
- 법학, Vol.40 No.2, pp. 291-317
- This paper revisits the concept of income in the context of schedular v. global or comprehensive income taxation, and shows that the concept of income incorporates an uneasy compromise between equity and individual freedom, a value judgement which differs from each country. More specifically, the thesis of the paper can be summarized as follows: i) the historical driving force of the income tax was the popular demand of tax equity, ii) the concept of tax equity tends to conflict with individual freedom and privacy, iii) in the overall trend of history, the arena of tax equity has been expanding while that of freedom and privacy has been contracting, iv) the differences among nations in defining the concept of income incorporates different historical path, and different value judgements, and v) despite the differences in starting points and the apparent differences in existing law, the concepts of income have been converging in the United Kingdom, Germany and the United States, and this convergence reflects the constitutional values shared by these different countries Part I abstracts the historical formation of the income tax, in the aspect that the primary force behind the ascent of the income tax was the growing popular demand of tax equity, intertwined with the growth of populist democracy. The income tax was born in the late 18th century in England and afterwards in other countries, as a desperate mean for financing a war. The new tax was considered a temporary evil necessary for coping with an exigency. Subsequently, however, a populist idea began to gain momentum that richer persons should pay more tax than the less rich, and this belief led to a reinvention of the income tax as a permanent part of the tax system. The populist concept of tax equity thus demanded a change in the concept of income, from the in-rem concept of schedular and source-limited taxation to a in-personam concept of aggregating any and all increases in a global and comprehensive taxation. Part II revisits the more or less known conflict between tax equity and individual freedom. Equity in income taxation means that taxpayers must pay the same amount of taxes if they have the same abilities to pay, and pay different amount of taxes if they have different abilities to pay. The economic well-being of a person, however, may change not only in the market or public sphere but in the private sphere of an individual. If the ability to pay must reflect the entire changes in a person's economic status, or further overall quality of life, it can only be measured where the government has a full access to the life of every individual, and can even command its citizens in choosing his or her way of life. Part III shows that the concept of income, as it exists in the legal systems of the contemporary world, incorporates an uneasy compromise between equity and freedom, which is the inherent boundary of the income concept. Neither equity nor freedom can entirely prevail over the other. The only viable solution then is to reserve separate dominions for each. Where to draw the borderline, however, is a value judgement, different from each country. History at a glance appears to show that the realm of equity has been expanding at the sacrifice of individual privacy and freedom. Despite the apparently striking differences between the comprehensive system of the United States and the schedular systems of Germany and the United Kingdom, the scope of taxable income is similarly based on the concept of market in reality.